ESSENTIALS OF LABOR UNION SUCCESS

The trend of modern progress is obviously towards more perfect industrial organization. The day of small doing is past. The existence of individual hand labor and small capitalists means using crude tools and wasteful methods, which always require much labor for little result and high prices with low wages. The highest application of science to production means large corporations. On the labor side of the problem, the trade union has shown itself to be the natural economic type of organization. It is to distribution what the corporation is to production. Whether these two types of organization will fill their natural function in the industrial progress of the future will depend very largely on the wisdom with which they are led. If their respective activities are directed along the lines of economic production, rendering superior service to the public while yielding profits to the investors, they will earn and receive the support of the public and soon become accepted and established institutions. But if they abuse the power of organization and use it for mere personal aggrandizement, to the injury of the public, they may create a storm that will be disastrous both to them and to society and make their coming a misfortune.

As the future safety of capital is really in the keeping of corporations, depending upon the sanity of their management, so the condition of labor and the opportunities for its progressive improvement are largely in the keeping of the trade unions. The responsibility for labor's share in the industrial progress of the future is largely with the trade unions. If they are to exercise the influence they ought to and can, they must rise to the plane of full economic equality with organized capital. This depends largely upon the character of union leadership and the sound economic education of workingmen through union

sources.

Much of the unfortunate experience of trade unions.

has been due to poor leadership; and this is not surprising in view of the narrow conception among laborers of the intellectual and moral equipment necessary for trade union leadership. It has always been an unfortunate characteristic of workingmen that, while they ask for high wages, they are unwilling to pay high wages to their own representatives. Some improvement in this respect has taken place during the last ten or fifteen years, but it is still the prevalent notion that those who work to advance labor interests are but scantily worthy of their hire.

In order to get first-class leaders the unions must pay first-class salaries. That is the only way the corporations can enlist capable men in their service, and trade unions can accomplish the same result only by doing likewise. It is not essential that the president of the national labor organization should be taken from the bench; he should not be elected because he is the best shoemaker or the finest carpenter, but because of his knowledge of and ability to understand and present the principles and interests involved in trade union purposes and policies.

Another step, and a very necessary one, in the greater perfection of labor organizations, is to make economic education a definite feature of the trade unions. This does not mean that a schoolmaster shall be called in, but it means that the study of economic principles as related to wages, capital and the community shall be a constant feature of trade union work. In any other department of life, systematic study and instruction are regarded as necessary to sound information and trustworthy thinking. If this method were systematically applied it would be only a few years before trade unions would furnish a body of men who could present the interests of labor and the economic justification of its demands with an ability equal to that of the representatives of capital, and whose influence would command the confidence and respect of the community. These men would soon become authorities on matters affecting labor, not only for laborers, but for publicists and statesmen. They would thus exercise an in

direct as well as direct influence upon the public policies of the nation.

This would necessarily tend to eliminate rashness from the trade unions' procedure, and would make them a rational force in the industrial world, to be courted and encouraged instead of feared by the public. Every step of progress in this direction would tend to make it more and more difficult for employers to refuse to recognize unions and treat openly and frankly with their representatives. But this can only come in a full and unreserved sense when the unions have learned to discipline themselves into a complete recognition of their own responsibility and maintain the absolute integrity of their contracts. The word of a union should be as sacred and as literally lived up to as if it were a financial contract, the violation of which involved a serious penalty.

All this would do much to make feasible the next great step in industrial organization, namely, a mutual union of employers and laborers upon a basis of full equality and responsibility. It is well known that most strikes are the result of passion or misunderstanding at some point. Either one side or the other loses its head and bad blood and irrational conduct follow; but in the settlement reason and compromise must ultimately be employed. What is needed, and must some day come, is a common effort to understand the situation, before instead of after the strike. This end would be accomplished by a mutual organization, to which all matters of dispute should be submitted before any action is taken on either side, and whose decision should be final. Of course this requires that employers fully recognize as equals the representatives of organized labor, and also that organized labor shall have a clear economic conception of the rights and interests of capital and the sacredness of contracts. This result will come because it is in the nature of progress, but how soon it will come depends largely upon the progress made by the trade unions themselves towards higher standards of economic education, leadership and responsibility.

THE INVESTMENT BANKER AS AN EDUCATOR

GEORGE CAREY

The investment banker of the present day, with no conscious educational intent, is nevertheless spreading far and wide a practical knowledge of current history. He is teaching people to observe, to make comparisons, to distinguish between the real and the ephemeral, and finally to draw logical conclusions through the analysis of figures tabulated from actual experience.

His market is

The investment banker is a merchant. growing world-wide. It is confined to no particular city or country, being limited only by the absence of surplus purchasing power. In order to reach this vast market, after the possibilities of personal acquaintance have been exhausted, the banker must resort to advertisement, which the dignity of his profession demands shall be achieved mainly through the gratuitous distribution of something every one desires; i. e., information. The investment banker has no secret purposes to be concealed, no patents necessitating protection from infringement. His reputation gains enviable stability in proportion to the frankness of his methods and the unimpeachable clearness with which he demonstrates the intrinsic worth of the properties for whose obligation he is standing sponsor. Although, to a degree, inevitably sensible of the fluctuations in securities notable for their speculative nature, his operations should be far removed from all enterprises not based upon incontrovertible soundness. To win that confidence from the public which is necessary to his being, uncertainty must, in so far as is attainable, be eliminated from his undertakings. Hence his willingness to invite scrutiny resulting in an endeavor to accumulate data that may be used as convincing argument as well as permissible advertising. His office is a depot for the garnering of facts, economic, industrial, political; and these are again bestowed upon the public in

the form of comprehensive circular and instructive pamphlet.

An actual insight into the methods of the investment banker in the conduct of his business may serve to indicate his status as an educational force in the community. Suppose, for example, that a great railroad corporation has determined upon a new issue of bonds for purpose of acquisition, or extension, or improvement, and has negotiated its sale to an investment banker, the latter's intention being to offer them in turn to the investing public. Having satisfied himself of the corporation's solvency and responsibility through his own familiarity with its history, augmented by legal advice, and frequently also by expert opinion, his next step is to convince his customers of the desirability of the investment he is recommending. Skilled statistical clerks are directed to prepare a circular setting forth the merits of the securities in question. Every known source is drawn upon for general information and specific figures. Often the investor is furnished with a history of the company's operations since the day of its incorporation, together with the names and standing of its officers and directors. The nature of the country through which the road passes is described in context subjoining, in many cases, an elaborately colored map whereon are plainly shown the portions mortgaged and the sequence of the various issues.

Nor are the sources whence the company's revenues accrue forgotten. The prospective purchaser learns whether the road is chiefly dependent upon freight or passenger charges; whether upon long hauls or short hauls. If dependent upon freight, whether upon agricultural products, or manufactures, or ores. He is let into the secrets of future development: the selection of town sites, the opening of mines, the establishment of factories, the acquisition of additional properties looking to the enhancement of general values and earning capacity. Tabulated statistics are supplied him indicating earnings per mile, earnings per share, and bonded indebtedness per mile of road. Contrast is also